- Alupak, the creator of the Nespresso capsule, has acquired global supplier ALUCAPS
- The capsule market has surged since Nespresso lost its patents, with over 400 competitors now in play
- As the market grows, regulators are tightening the restrictions on waste
ALUPAK AG, the Swiss packaging company known for its pioneering role in coffee capsule manufacturing, is preparing for the future.
In a move that signals both strategic foresight and a commitment to sustainable growth, Alupak recently acquired Norden Alu Technology SL of Spain’s business trading under the name ALUCAPS, a global supplier of aluminium packaging solutions.
This acquisition hints at larger ambitions, not just for Alupak, but for the coffee capsule industry itself – a sector that continues to expand despite growing concerns over waste and sustainability.
Alupak’s acquisition of ALUCAPS is not merely about scaling operations; it is a strategic play aimed at product diversification, reinforcing the company’s sustainability credentials, and consolidation to access new markets.
“The gist of the acquisition has to do with market overcapacity and consolidation in the Aluminium Nespresso compatible space,” says Martyna Fong, Director of Market Intelligence at AMI.
“Alupak was a primary supplier of Nespresso Original capsules, but the exclusivity relationship with the customer has come to an end. Alupak has turned towards the Nespresso compatible market with their compatible design. Given market maturity, a most optimal solution was to enter that market segment via acquisition of AluCaps, an established supplier of compatible Nespresso capsules.”
Nespresso aggressively fought rivals over patent infringements, but in 2012, key patents from 1992 expired. After losing cases in Germany and England and settling others across Europe, the company had to accept that it could no longer block the sale of third-party capsules for its machines. These days there are more than 400 competitor capsules.
By bringing ALUCAPS into its fold, Alupak strengthens its position across multiple sectors, including pharmaceuticals and cosmetics. However, coffee remains the jewel in the crown.
For the Swiss company, this acquisition aligns with the company’s growing focus on sustainability. Aluminium is infinitely recyclable, making it a preferred choice for eco-conscious consumers and companies alike. By pooling resources, Alupak aims to develop even more advanced sustainable packaging solutions, while simultaneously expanding its footprint in international markets.
The timing of the acquisition is noteworthy. The coffee capsule market, particularly in Europe, was booming in the last decade, especially during COVID. In 2021, JDE Peet’s invested €110m to boost capsule production in France by 60%, responding to rising demand for at-home coffee. In 2022, Nestlé expanded its premium offerings under Nescafe, Nespresso, and Starbucks to compete for both home and out-of-home coffee markets.
Today, according to AMI, the global single serve capsules demand exceeds 82 billion units in 2024. The market growth has largely slowed down now after years of rapid development driven by rise of compatibles – making consolidation for wider market access a strategic move.
But it is also under scrutiny for its environmental impact, with consumers and regulators alike pushing for more sustainable packaging solutions. Alupak, by enhancing its production capabilities through ALUCAPS, is positioning itself to lead the way in responding to these pressures.
The history of capsules
Alupak’s connection to the world of coffee capsules dates back to the 1980s when the company co-developed the first Nespresso capsules.
At the time, the idea of single-serve coffee was revolutionary. Nespresso, owned by Nestlé, introduced consumers to a new way of brewing coffee – capsules that promised espresso-quality drinks without the need for expensive machines or complicated brewing techniques.
Alupak’s role was pivotal; the Swiss manufacturer provided the expertise needed to create a lightweight, durable aluminium capsule capable of preserving coffee’s freshness while withstanding the pressure required for brewing.
The rise of Nespresso capsules marked a seismic shift in how coffee was consumed, especially in Europe. While Europeans were long accustomed to espresso, Nespresso capsules made it possible to enjoy cafe espresso at home, pushing capsule consumption into the mainstream.
Over time, other brands followed suit, and soon capsules became a standard offering in supermarkets across the continent.
Meanwhile, across the Atlantic, the U.S. market was taking a different approach. Instead of espresso-based capsules, Americans gravitated towards pods, particularly those compatible with Keurig’s brewing systems.
While Keurig’s pods focused on drip coffee, appealing to the American preference for large, filtered cups, the capsule format – centred on smaller, more concentrated espressos – dominated Europe.
The divergent preferences between the two regions are evident even today, with Nespresso’s espresso-style capsules still enjoying widespread popularity in Europe, while Keurig’s filter coffee pods maintain their stronghold in the US, where single-cup brewers are the second-most popular at-home preparation method, and there has been a 45% increase in Americans’ single-cup brewer ownership since 2017.
This contrast highlights how regional coffee cultures have shaped the evolution of coffee packaging and consumption. In Europe, capsules are often seen as a luxury item, marketed as part of a premium coffee experience.
In the U.S., pods are positioned as a convenient, everyday solution for coffee drinkers who value volume over quality. Alupak, as a key player in the development of capsules, has been a silent architect of this European trend toward high-quality, single-serve espresso.
What’s next for capsules
As Alupak looks to the future, the coffee capsule market is at a crossroads. The convenience that capsules offer remains as appealing as ever, but environmental concerns are putting pressure on companies to innovate.
In Europe, where capsules have become a staple, consumers are increasingly aware of the environmental cost of single-use packaging. In response, Alupak’s commitment to aluminium as a recyclable material positions it to lead the industry toward more sustainable solutions.
The challenge, however, goes beyond recyclability. As regulators tighten their focus on reducing waste – with measures like the Packaging and Packaging Waste Regulation (PPWR), an ambitious EU regulation aimed at reducing packaging pollution and promoting a circular economy for packaging, and the pending Extended Producer Responsibility (EPR) in the US – there is growing interest in compostable materials and reusable capsules.
“End-of-life options for capsules will be regulated for sustainability within the PPWR, alongside other post consumer packaging waste, so there is no need to debate it, but rather come together as an industry to support cost optimal disposal routes,” says Martyna.
“We may see system migration driven by pending EPR and packaging waste costs, which can stimulate growth momentum for some but to the detriment of others. Material segmentation and a new R&D focus now includes fibre options, but more work is needed.”
Alupak will need to innovate quickly to meet these demands, even as its competitors explore alternatives like biodegradable plastics and plant-based packaging.
In the U.S., the future of coffee pods looks slightly different. While sustainability is a growing concern, the American market remains more focused on convenience. The challenge for companies like Alupak will be to introduce more environmentally friendly products without compromising the ease-of-use that American consumers have come to expect from pod-based systems like Keurig.
Another factor shaping the future of capsules is consumer preference. In Europe, espresso remains king, and capsules will likely continue to cater to this demand. But in the U.S., where filter coffee dominates, there may be room for growth in capsule-based espresso machines.
As American tastes evolve, particularly among younger consumers who are more likely to embrace global coffee trends, there is potential for espresso capsules to gain a stronger foothold in the U.S. market – in fact, Nespresso is already gaining ground.
The question now is how quickly the industry will adapt to the twin pressures of sustainability and changing consumer habits.
Alupak’s acquisition of ALUCAPS shows that it is preparing for a future where coffee convenience is not just about speed and taste, but also about minimising environmental impact, and diversifying products and markets to ensure relevance and growth.
Coffee Intelligence
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